The strategic management processes of KPMG - Assignment Example

You should use the model as a framework to guide your discussions, but also (as appropriate) draw upon wider CSR literatures. Contents Contents 2 Introduction 3 Overview of the company 3 Human Resource Management  4 Strategy and the process of strategic management 5 Strategic management and results 6 CSR activities of KPMG 8 Conclusion and recommendations 10 References 13 Introduction This report would discuss the strategic management processes including the Human Resource Management (HRM) and Corporate Social responsibility (CSR) practices of a globally acclaimed multinational organization, KPMG. The report would start with a general overview of the company and its operations followed by a section dedicated to the analysis and discussion of the strategic management perspectives of the company. The Human Resource Management (HRM) practices of the company will be discussed and explained with focus given on the management of employee resources, employee voice and employee relations so as to understand the effectiveness of the management of KPMG in strategically managing the most significant resource of the organization which is the people resource. Also, a section would include the identification of the major Corporate Social Responsibility initiatives taken up by KPMG over the years of its existence and relate them to the existing CSR theories and models. Overview of the company KPMG is one of the biggest professional services and consulting firm in the world. Along with Ernst & Young, PricewaterhouseCoopers and Deloitte Touché Consulting, KPMG is one of the Big Four auditing companies in the globe. The headquarters of the company are located in Amstelveen, Netherlands. KPMG is one of the most famous and preferred employers in the financial services sector. Currently, the company employs more than 162000 people in more than 16 geographical locations. The company has three main divisions of service which are advisory, Tax and audio services. The audit services account for 42% of the revenues as of 2014, the advisory services account for 37% and the tax services account for 21% of the total revenue generated by the consulting firm in the year 2014. The company has been able to establish and maintain an ethical, sustainable and responsible image for the business over the years of its operations through a number of strategic management processes including employee management and Corporate Social Responsibility (CSR) activities. Human Resource Management  Managing the voice of the employees is a key aim of the human resource management of KPMG. The company aims to achieve sustainability and competitive advantage through the management of its people resources. For this purpose, the management of KPMG focuses on developing uniform standards and guidelines in all its business locations that help to streamline the HRM processes as well as integrate the business activities and objectives in the basic principles and dynamics of human resource management. The branch of KPMG in the United States of America was rated as one of the top 100 organizations for working mothers in 2010. Also, according to the Forbes magazine’s list of 10 best comparison in the globe published in 2009, KPMG is the 56th best company to work for, as voted by the employees. The company has also been listed as the 4th rank holder in the list of the “50 Best Places to Start a Career” in the year 2009 as per the report by Business Week. Also, KPMG made it to the top 3 in the list of the best big company to work for in the United Kingdom for 4 consecutive years from 2005 to 2009. KPMG remained one of the Top 100 employers of Canada for 8 years from 2002 to 2010. KPMG publishes a unique program known as the “Flexible Futures” which has been specially designed for its employee groups. This program was aimed at allowing the KPMG employees to volunteer to give the organization an option to send them to a sabbatical for up to 12 weeks at 30% pay or to decrease their weekly working hours to four days in a week. This was launched as a supportive scheme for the employees and acts as an alternative and innovative approach to reduce the redundancies in the functioning of the employees of the company in each of the departments. Over 75% of the total employees in each business unit of KPMG has been participating and volunteering for this program since its launch in the year 2009. The company has been equally proficient in maintaining its human resource management practices in the developing countries like China and Hong Kong with the estimations being that the headcount of employees in KPMG in China will surpass that of the employees of the company in the United Kingdom by the end of the year 2014. The company has taken up specific strategies to manage the employee relations and employee resources in the developing and controversial economies like China and Hong Kong so that the sustainability and ethicality perspectives of the business can be adequately adhered to. Also, focusing on the stakeholder perspective of the CSR activities as a main part of human responsibility is identified to be a key to success and sustainability of the business in the future years (Lantos and Cooke, 2003). KPMG aims at developing sustainable competitive advantage through the creation of a well motivated and interested workforce. The management, support and development of the employees of the company have always remained a priority for the management of KPMG. As such, the KPMG offices in all the locations across the world are run on the basis of the same set of guidelines and standards related to Human Resource Management (HRM). This includes the recruitment and selection, training and development as well as the creation of a positive work culture in the business units. Strategy and the process of strategic management Commitment towards the communities and towards all the internal and external stakeholder groups of the company lies at the heart of the business of KPMG. The company has been employing a number of innovative and distinct strategic management policies and principles in order to ensure better sustainability as well as improvement in the performances of the individual employees and the organization as a whole. The strategic management principles of KPMG include leadership, values and commitments which have enabled the company to function as a globally renowned consulting firm. The Business Performance Services (BPS) of KPMG has been devised as the practice which will provide services to a wide array of industrial sectors which are experiencing different opportunities and challenges triggered by diverse global business environmental factors. These factors may include drive for efficiency and effectiveness, increasing level of international competition, changing requirements of international financial reporting standards and practices etc. Strategic management and results The strategic management process of a company essentially includes the CSR approaches and initiatives. In the present day scenario, the stakeholder perspective of Corporate Social Responsibility (CSR) is emerging as the most influential category of CSR objective. This perspective refers to a set of views related to corporate responsibility which is held by all entities and constituents who have a direct or indirect relationship to an organization. As per the normative model of CSR, a company has to accept and implement the views of the internal and external stakeholders as long as they are in line with the business objectives and do not act as hindrances in the functioning of the organization. KPMG has partnered with a number of third party organizations which help the organization to guide the human resource of the company through various change management processes. The company uses an integrated approach to ensure that the managers are able to lead, support and sustain the human resources efficiently (Sacconi, 2004). The HR dynamics of the company can be especially noted during the transition and transformation phases introduced in the business activities. The CSR programs in KPMG are seen as the main aid for employee recruitment as well as employee retention. The company is widely engaged in CSR activities which have developed an ethical and dependable image for the same on the minds of the global citizens. Therefore, more and more employees across the world want to become a part of the renowned multinational. The CSR program of the business are seen as a main instigator of employment requires, especially among the intensely competitive potential employees market. The Corporate Social Responsibility (CSR) activities of the company have helped to improve the overall image and perception of the company among its existing and potential employees (Eisingerich and Ghardwaj, 2011). The involvement of the employees in the CSR activities through the use of different activities like fundraising processes, community volunteering and payroll giving has acted as a favourable strategy for the company in the creation of an efficient and high performing employee base and employee relations. Also, the CSR initiatives of KPMG have acted as a main driver of customer orientation through the creation of a workforce that is customer facing in nature (Korschun, Bhattacharya and Swain, 2014). Also, training given to the employees regarding the strict management of ethicality is an important part of the strategic management of the consulting multinational. The training and development initiatives taken u to educate the employees about the ethical principles and standards that they should conform to not only helps the organization to develop a conscious and conforming group of employees but also help to achieve the ultimate objective of CSR activities which is creating a responsible and ethical brand image among the minds of the global consumer groups. This helps to add to the sustainability, competitive advantage as well as the ethical compliance level of the company. CSR activities of KPMG KPMG is a leader in both Human Resource Management and Corporate Social Responsibility Activities. The company follows the 3E principle of CSR in its global operations. These 3Es stand for Empowerment, Education and Environment. The company uses this principle to develop long term and genuine commitment from its global stakeholders including the internal stakeholders as well as the external stakeholder groups (Beth and Singh, 2005). The setup of the CSR scenarios of the company are built up on the belief that collective action of all the employees and business partners of the organization can lead to a positive impact. KPMG focuses on creating a solid platform for the employee groups so that they can emerge as influential and active global citizens. Also, KPMG strives to ensure the maintenance of sustainability and ethicality both from an individual as well as a business perspective. The main aim of the company is to develop professional and innovative expertise and leadership that will act as the base for developing strong communities (Carroll, 2009). Apart from this, people empowerment and reduction of the impacts of the business operations on the environment are other main focuses of KPMG in its global operations. The values followed by KPMG in the strategic management are represented in Figure 1. Figure 1: KPMG values (Source: KPMG Corporate Website, 2014). The process of attracting and retaining skilled and talented employees is one the most dynamic challenges faced by all organizations functioning in the modern international business environment. KPMG has successfully integrated the Human Resource Management (HRM) techniques and objectives in its CSR initiatives. The company focuses on the development of the right people with the right behaviour and skills that can add to the competences and performances of the individual employees as well as the organization as a whole unit (Bhattacharya, Sankar and Korschun, 2008). The CSR activities of the company are aimed at creating value of the people as well as for the people related to the organization. This is justified in the 3E principle of CSR in KPMG which emphasizes on the empowerment of people as a priority of the organization. Thus, KPMG creates an optimal design that focuses in both the human resource management functions of the business and on transforming the human resource functions into strategic value adding factors for the same (McWilliams and Siegel, 2001). Conclusion and recommendations All the companies operating in the current business environment has to mandatorily take up CSR initiatives to a certain extent. However, the consistency of the multinational companies in implementing CSR approaches in their business processes in different locations across the globe is often inadequate in practice. In case of KPMG, it can be found that the company has been efficient in maintaining consistency in its ethically and socially responsible activities in its operations across the globe. One of the main objectives of the companies while engage in CSR activities is to create a satisfied group of stakeholders. This includes both the internal stakeholders like the employees of the company and the external stakeholders like the clients, customers, government and shareholders of the business. In case of KPMG, it can be highlighted that the company drives all its CSR activities on the basis of the 3E framework which includes education, environment and empowerment of people. Nevertheless, it can be suggested according to the traditional CSR theories that the company should focus on other ancillary aspects of CSR like human responsibility and product responsibility as well. Figure 2: The Triple Bottom Line Model (Source: Paluszek, 2005) The Triple Bottom Line model should be widely used in the strategic management process of KPMG. The Triple bottom line principle is a way of evaluating and assessing the CSR activities of a company. The 3 Ps in this model refer to People, Profit and Planet. KPMG should ensure that it is able to generate more economic value i.e. profit from the business along with its focus on people management and sustainable environmental practices or planet management. Implementing this model in the business would ensure that every unit of the business becomes more conscious about their moral and social responsibilities. As the company becomes well known as an ethical and responsible organization, the interests of the potential employees to work for this organization increases. Again, as the employees are managed and trained properly, it is ensured that the performance of the organization improves as well as the company becomes able to create a strong brand image for itself. Thus, in this respect both the CSR activities and the Strategic HRM activities of the company are interlinked to each other and ultimately help the company to achieve its primary business objectives. References Beth, K. & Singh, P. 2005. Corporate Social Responsibility as Risk Management: A Model for Multinationals. Cambridge: OUP. Bhattacharya, C. B., Sankar, S. & Korschun, D. 2008. Using Corporate Social Responsibility to Win the War for Talent. MIT Sloan Management Review, Vol. 49 (2), pp. 37–44. Carroll, A. B. 2009. A Three Dimensional Model of Corporate Performance. Academy of Management Review. Vol.4 (4), pp. 497–505.  Eisingerich, A. B. & Ghardwaj, G. 2011. Corporate Social Responsibility: Does Social Responsibility Help Protect a Companys Reputation?" MIT Sloan Management Review. Vol. 52 (1), pp.180–181. Korschun, D., Bhattacharya, C. B. & Swain, S. D. 2014. Corporate Social Responsibility, Customer Orientation and the Job Performance of Frontline Employees. Journal of Marketing. Vol.78 (3), pp.20-24. KPMG Corporate Website. 2014. Strategic Human Resource Management. [Online]. Available at http://www.kpmg.com/dutchcaribbean/en/services/advisory/pages/strategichumanresourcesmanagement.aspx. [Accessed on 18 December 2014]. Lantos, G. P. & Cooke, S. 2003. Corporate Socialism Unethically Masquerades as "CSR": The Difference between Being Ethical, Altruistic, and Strategic in Business. Strategic Direction, Vol. 19(6): pp. 31–35. McWilliams, A. & Siegel, D. 2001. Corporate social responsibility: A theory of the firm perspective.  Academy of Management Review. Vol.26 (1), pp.117–127. Paluszek, J. 2005. Ethics and Brand Value: Strategic Differentiation. Business and Organizational Ethics Partnership, Vol. 34(1), pp.101-104. Sacconi, L. 2004. A Social Contract Account for CSR as Extended Model of Corporate Governance (Part II): Compliance, Reputation and Reciprocity. Journal of Business Ethics, Vol. 44(1), pp.91-96. Read More